# German retail slump highlights COVID roadblocks to recovery Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-02-01 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: German Retail Sales Plummet in December Amid COVID Curbs Meta Description: Discover the impact of COVID-19 restrictions on German retail sales in December. Despite challenges, signs of economic recovery in early 2022 are promising. URL: https://financedigest.com/german-retail-slump-highlights-covid-roadblocks-to-recoveryhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-02-01t082132z2lynxmpei101ahrtroptp4germany-economy-inflation-1736816273186-compressed.jpg) By Zuzanna Szymanska BERLIN (Reuters) -A big fall in German retail sales as COVID-19 curbs kept people out of shops over the usually busy Christmas period underlined its flagging economic recovery, but signs that jobs and production are picking up suggested a brighter start to 2022. Data on Tuesday showed retail sales tumbled 5.5% in December in real terms, a much steeper decline than the 1.4% forecast by a Reuters poll of economists. Sales of textiles, clothing, shoes and leather goods were hit especially hard by a requirement that customers in non-essential shops show proof of [COVID-19 vaccination](https://www.financedigest.com/gsk-sk-bioscience-to-test-covid-19-vaccine-against-astrazeneca-shot.html "GSK, SK Bioscience to test COVID-19 vaccine against AstraZeneca shot") or recovery, part of measures imposed to halt the Omicron wave of the virus. “The usual end-of-year fireworks clearly backfired this time,” said Alexander Krueger, an economist at Hauck Aufhaeuser Lampe Privatbank. “The new restrictions are a big part of this. Many people are probably also [cutting back on spending as they are afraid of high energy costs.”](https://www.financedigest.com/cutting-business-costs-pros-of-using-commercial-heat-pumps-in-2016.html "Cutting business costs: Pros of using commercial heat pumps in 2016") Surveys of Germany’s labour market and manufacturing sector struck a more positive note, suggesting that producers were starting to crank up output as [supply shortages ease](https://www.financedigest.com/oil-prices-rise-as-china-eases-covid-curbs-u-s-storm-fuels-supply-worries.html "Oil prices rise as China eases COVID curbs, U.S. storm fuels supply worries"). COVID measures and supply chain problems that have affected Germany’s large auto industry contributed to a final quarter [contraction of 0.7% in Europe’s biggest economy compared](https://www.financedigest.com/legislate-raises-3-6m-to-give-startups-smes-the-technology-to-query-and-compare-every-contract.html "Legislate raises .6M to give startups & SMEs the technology to query and compare every contract") to Q3 and kept growth to 2.8% in all of 2021. The [German economy underperformed the wider euro](https://www.financedigest.com/stellantis-to-invest-130-million-euros-in-german-plant-for-new-opel-electric-car.html "Stellantis to invest 130 million euros in German plant for new Opel electric car") zone, and notably its second-biggest economy, France, which grew 7% last year, the most since 1969, data on Friday and Monday showed. France largely lifted pandemic-related restrictions towards mid-year. It has reported 3,489 infections per 100,000 [people over the last seven days](https://www.financedigest.com/over-a-third-of-uk-people-think-thomas-whitmore-from-independence-day-will-be-joined-by-donald-trump-in-disneys-hall-of-presidents.html "Over a third of UK people think Thomas Whitmore from Independence Day will be joined by Donald Trump in Disney’s Hall of Presidents"), compared with 1,285 in Germany. Worries about rising prices, especially for energy, among inflation-wary [Germans are likely to hit](https://www.financedigest.com/cash-loving-germans-fret-over-exploding-atms-as-cross-border-crime-wave-hits.html "Cash-loving Germans fret over exploding ATMs as cross-border crime wave hits") retailers further in 2022, industry association HDE said, warning that almost 16,000 shops could disappear this year. It said [online shopping](https://www.financedigest.com/the-high-street-is-dead-long-live-online-shopping.html "The high street is dead – long live online shopping! ") was likely to drive growth in the sector this year, expanding 13.5% compared to 1.2% for physical shops, and called for the bar to be lifted on non-essential shopping by unvaccinated people to help smaller retailers. This measure, which is useless in the [fight against the pandemic](https://www.financedigest.com/g20-want-70-of-world-vaccinated-by-mid-2022-sets-up-task-force-for-pandemic-fight.html "G20 want 70% of world vaccinated by mid-2022, sets up task force for pandemic fight"), must finally be dropped nationwide,” HDE Chief Executive Stefan Genth said in a statement. About a [quarter of the German](https://www.financedigest.com/german-gdp-contracted-by-0-4-in-the-fourth-quarter.html "German GDP contracted by 0.4% in the fourth quarter") population is not vaccinated against COVID-19. [SALES STABLE ON YEAR](https://www.financedigest.com/spains-november-retail-sales-fall-0-6-on-year.html "Spain’s November retail sales fall 0.6% on year") [Retail sales](https://www.financedigest.com/uk-retailers-turn-positive-on-sales-hopes-after-bleak-winter.html "UK retailers turn positive on sales hopes after bleak winter") is a volatile indicator and often subject to revisions. The Federal Statistics Office said [sales figures adjusted for prices](https://www.financedigest.com/renault-revenues-rise-30-in-q1-on-higher-sales-and-prices.html "Renault revenues rise 30% in Q1 on higher sales and prices") remained stable on the year, compared with an average Reuters poll forecast for an increase of 1.1% compared with December 2020. The December decline is probably related to the fact many retail outlets have started [asking for proof of COVID-19 vaccination](https://www.financedigest.com/ford-asks-u-s-salaried-employees-to-disclose-covid-19-vaccination-status.html "Ford asks U.S. salaried employees to disclose COVID-19 vaccination status") or recovery, and the impact of seasonal adjustment due to Christmas,” it said in a statement. Compared with February 2020, the month before the coronavirus crisis hit Germany, [retail sales](https://www.financedigest.com/valentines-day-spending-boosts-british-retail-sales-in-february-brc.html "Valentine’s Day spending boosts British retail sales in February – BRC") in December 2021 were up 0.7%. Recent surveys have suggested morale is improving among [German businesses as supply bottlenecks ease](https://www.financedigest.com/german-inflation-rate-to-ease-over-course-of-2023-econ-minister.html "German inflation rate to ease over course of 2023 – econ minister"). (Reporting by Zuzanna Szymanska; Editing by Miranda Murray, Alex Richardson and Catherine Evans) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---